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Austerity measures have a very human impact

The Guardian had a piece a few days back, discussing the health repercussions of austerity measures (attempts to balance the budget by reducing funding for public services). Looking at Greece as an example:

Cuts in HIV-prevention budgets have coincided with a 200% increase in the virus in Greece, driven by a sharp rise in intravenous drug use against the background of a youth unemployment rate now running at more than 50% and a spike in homelessness of around a quarter.

This is in stark contrast to Iceland, which also suffered a complete financial meltdown:

What also bugs Stuckler – an economist as well as a public-health expert – is that neither Iceland nor any other country that “protected its people when they needed it most” did so at the cost of economic recovery. “It didn’t break them to invest in programmes to help people get back to work,” he says, “or to save people from homelessness. Iceland now is booming; unemployment fell back to below 5% and GDP growth is above 4% – far exceeding any of other European countries that suffered major recessions.”

And the most key part of the entire article (this is where libertarians and fiscal conservatives tend to get things wrong):

Drilling into the data shows the fiscal multiplier – the economic bang, if you like, per government buck spent, or cost per buck cut – for spending on healthcare, education and social protection is many times greater than that for money ploughed into, for example, bank bailouts or defence spending.

It’s common sense that bailing out banks would have a dramatically different effect than supporting health programs and the other safety nets in times of need – it’s about time this became economic sense as well.